Amalgamated Financial Corp. Reports Preliminary Results for the Second Quarter 2023 and Announces Second Quarter 2023 Earnings Conference Call
Immediate Liquidity Coverage at 183% of Uninsured Deposits Excluding Super-Core
Common Equity Tier 1 Capital Ratio of 12.49%, Above "Well Capitalized" Levels
Second Quarter 2023 Highlights (on a linked quarter basis)
- Net income of
$21.6 million, or $0.70per diluted share, compared to $21.3 million, or $0.69per diluted share.
- Core net income of
$22.0 million, or $0.72per diluted share, as compared to $23.0 million, or $0.74per diluted share.
Deposits and Liquidity
- Total deposits decreased
$146.7 million, or 2.1%, to $6.9 billionincluding a $126.4 milliondecline in Brokered CD utilization.
- Excluding Brokered CDs, deposits remained essentially unchanged at
$6.4 billion, reflecting a strong and stable deposit base.
- Average cost of deposits, excluding Brokered CDs, was 87 basis points for the quarter, where non-interest bearing deposits remained steady and comprised a noteworthy 46% of total deposits.
- Super-core deposits totaled approximately
$3.6 billion, had a weighted average life of 17 years, and comprised 55% of total deposits excluding Brokered CDs.
- Total uninsured deposits were
$3.9 billion, improving to 57% of total deposits. Excluding uninsured super-core deposits of approximately $2.5 billion, remaining uninsured deposits were approximately 20-23% of total deposits with immediate liquidity coverage of 183%.
- Cash and borrowing capacity totaled
$2.6 billion (immediately available) plus unpledged securities (two-day availability) of $758.3 million for total liquidity within two-days of $3.3 billion (improving to 85% of total uninsured deposits).
Assets and Margin
- Loans receivable, net of deferred loan origination costs, increased
$53.5 million, or 1.3%, to $4.3 billion.
- PACE assessments grew
$64.3 millionto $1.1 billion.
- Net interest income was
$63.0 million, at the high-end of the guidance range provided in the first quarter. Net interest margin was 3.33%, in line with expectations.
- Repurchased approximately 139,000 shares, or
$2.2 million of common stock under the Company's $40 millionshare repurchase program announced in the first quarter of 2022.
- The Company expects to continue repurchasing shares through its common stock share repurchase program, with
$23.5 millionof remaining capacity. The timing and exact amount of stock repurchase activity will be informed by economic and regulatory considerations as well as Amalgamated's position, earnings outlook, and capital deployment priorities.
Investments and Capital
- Tangible common equity ratio of 6.59%, represents another consecutive quarter of improvement.
- Available for sale securities, which are 73% of the Company's traditional securities portfolio, had unrealized losses of 7.6%, with an effective duration of 1.8 years.
- Held-to-maturity securities, which are 27% of the Company's traditional securities portfolio, had unrealized losses of 11.0%, with an effective duration of 4.1 years.
- Regulatory capital remains above bank “well capitalized” standards, with a Common Equity Tier 1 ratio of 12.49% at
June 30, 2023, and continues to increase in line with strategic plans.
- Our leverage ratio was 7.78%, an increase of 28 basis points from the prior quarter.
Second Quarter 2023 Earnings Release and Conference Call:
The Company will release its second quarter 2023 financial results before market open on
Investors and analysts interested in participating in the call are invited to dial 1-877-407-9716 (international callers please dial 1-201-493-6779) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available on the website at https://ir.amalgamatedbank.com/.
A replay of the conference call will be available within two hours of the conclusion of the call and can be accessed both online and by dialing 1-844-512-2921 (international callers please dial 1-412-317-6671). The pin to access the telephone replay is 13739618. The replay will be available until
Non-GAAP Financial Measures
This release (and the accompanying financial information and tables) refer to certain non-GAAP financial measures including, without limitation, “Core net income,” and “Tangible common equity,”
Our management utilizes this information to compare our operating performance for
The presentation of non-GAAP financial information, however, is not intended to be considered in isolation or as a substitute for GAAP financial measures. We strongly encourage readers to review the GAAP financial measures included in this release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this release with other companies’ non-GAAP financial measures having the same or similar names. Reconciliations of non-GAAP financial disclosures to comparable GAAP measures found in this release are set forth in the final pages of this release and also may be viewed on our website, amalgamatedbank.com.
Certain terms used in this release are defined as follows:
“Super-core deposits” are defined as total deposits from commercial and consumer customers, with a relationship length of greater than 5 years. We believe the most directly comparable GAAP financial measure is total deposits.
“Core net income” is defined as net income after tax excluding gains and losses on sales of securities, gains on the sale of owned property, costs related to branch closures, restructuring/severance costs, acquisition costs, and taxes on notable pre-tax items. We believe the most directly comparable GAAP financial measure is net income.
“Tangible common equity” is defined as stockholders’ equity excluding, as applicable, minority interests, preferred stock, goodwill and core deposit intangibles. We believe that the most directly comparable GAAP financial measure is total stockholders’ equity.
"Traditional securities portfolio" is defined as total investment securities excluding PACE assessments. We believe the most directly comparable GAAP financial measure is total investment securities.
Statements included in this release that are not historical in nature are intended to be, and are hereby identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act, Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified through the use of forward-looking terminology such as “may,” “will,” “anticipate,” “aspire,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “in the future,” “may” and “intend,” as well as other similar words and expressions of the future. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, any or all of which could cause actual results to differ materially from the results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: (i) uncertain conditions in the banking industry and in national, regional and local economies in our core markets, which may have an adverse impact on our business, operations and financial performance; (ii) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (iii) deposit outflows and subsequent declines in liquidity caused by factors that could include lack of confidence in the banking system, a deterioration in market conditions or the financial condition of depositors; (iv) changes in our deposits, including an increase in uninsured deposits; (v) unfavorable conditions in the capital markets, which may cause declines in our stock price and the value of our investments; (vi) continued fluctuation of the interest rate environment, including changes in net interest margin or changes that affect the yield curve on investments; (vii) potential deterioration in real estate collateral values; (viii) changes in legislation, regulation, public policies, or administrative practices impacting the banking industry, including increased regulation and
Reconciliation of GAAP to Non-GAAP Financial Measures
The information provided below presents a reconciliation of each of our non-GAAP financial measures to the most directly comparable GAAP financial measure.
|As of and for the|
|Three Months Ended|
|Core net income|
|Net Income (GAAP)||$||21,642||$||21,338|
|Less: Securities (gain) loss||267||3,086|
|Less: Subdebt repurchase gain||—||(780||)|
|Add: Other one-time expenses||285||—|
|Less: Tax on notable items||(147||)||(604||)|
|Core net income (non-GAAP)||22,047||23,040|
|Add: Tax (credits) depreciation on solar investments||—||—|
|Add: Tax effect of solar income||—||—|
|Core net income excluding solar tax impact (non-GAAP)||22,047||23,040|
|Tangible common equity|
|Stockholders' equity (GAAP)||$||528,614||$||519,158|
|Less: Minority interest||(133||)||(133||)|
|Less: Core deposit intangible||(2,661||)||(2,883||)|
|Tangible common equity (non-GAAP)||512,884||503,206|
Source: Amalgamated Financial Corp.